Half Of Medicare Payments To Go Through ACOs, Bundles, By 2018, Administration Announces

1/26/2015

Bill Myers

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At least half of Medicare payments will be filtered through accountable care organizations (ACOs) or other bundled payment methods within three years, the Obama administration announced Monday.

“We are dedicated to using incentives for higher-value care, fostering greater integration and coordination of care and attention to population health, and providing access to information that can enable clinicians and patients to make better-informed choices,” Health and Human Services Secretary Sylvia Burwell said in an announcement published in the New England Journal of Medicine on Monday as part of her agency’s media rollout. “We believe that, by working in partnership across the public and private sectors, we can accelerate these improvements and integrate them into the fabric of the U.S. health system.”

Legislators, policymakers, and even providers have long been pushing Medicare toward a value-based purchasing system, where providers are rewarded for the quality of their care and not just the volume of residents or patients they serve. The leader of the nation’s largest post-acute care providers’ association said Monday that Burwell’s announcement was well timed.

“We have been in the process of finding smarter ways to inject greater accountability and savings into the Medicare payment structure,” American Health Care Association President and Chief Executive Officer Mark Parkinson said. “What we have today is in need of repair.

“We are encouraged that the administration has also made this a priority, and we hope we can continue working with the White House, CMS [the Centers for Medicare & Medicaid Services], and other stakeholders to determine the best path forward for achieving the administration’s aggressive goals without sacrificing access to high-quality skilled nursing care for our nation’s seniors,” Parkinson added.

Monday’s announcement marks the first time since the Affordable Care Act took effect in 2010 that the federal government has offered up a specific timeline for ACOs or bundled payments.

The administration hopes to have 30 percent of all Medicare dollars pushed through ACOs or bundled payment systems by the end of next year, Burwell says.

“Three years ago, Medicare made almost no payments through these alternative payment models, but today such payments represent approximately 20 percent of Medicare payments to providers, and … we aim to increase this percentage,” Burwell writes in the New England Journal of Medicine. “As part of this work, we also recognize the need to continue to reach consensus on the quality measures used and address issues related to risk adjustment in these new models.”